Middle East office market: Niche financial firms need to move fast to secure space

Adam Wynne, Partner - Head of Commercial Agency, United Arab Emirates, explains the forces shaping niche financial firms' real estate decisions across Dubai, Abu Dhabi and Riyadh.  

What are the primary factors driving leasing decisions for niche financial firms in your market?

The limited availability of Grade A office space remains one of the biggest challenges. Vacancy rates remain exceptionally low, with Dubai's prime office stock largely full, occupancy on Abu Dhabi's Al Maryah Island over 95%, and Riyadh recording some of the lowest vacancy rates in the GCC.

The drivers behind demand differ by market. In Dubai and Abu Dhabi, growing capital migration to the Gulf is attracting fund managers and investment firms that might previously have chosen hubs such as Singapore or Hong Kong. Favourable tax regimes, access to sovereign wealth capital and a strategic time zone position continue to strengthen the region's appeal.

In Riyadh, regulatory requirements remain a major catalyst. Since January 2024, government entities have generally been unable to contract with companies whose regional headquarters are located outside Saudi Arabia, making a Riyadh presence increasingly important for firms doing business in the Kingdom.

What new factors are shaping office requirements?

A key shift is the region's evolution from a fundraising destination into an investment and operating hub. The arrival of major private-market firms in Abu Dhabi and Dubai has led to larger teams, longer-term commitments and workplace strategies aligned with broader growth ambitions.

Sustainability has also become a core consideration. Institutional investors increasingly expect offices to meet environmental and wellness standards, with certifications, smart-building technology and employee wellbeing features now common requirements.

At the same time, AI and data-intensive operations are increasing demand for resilient power, strong connectivity and robust digital infrastructure. Competition for talent is also prompting firms to place greater emphasis on workplace quality and employee experience.

What are the non-negotiables when choosing office space?

Location remains critical. For regulated financial firms, being in the correct jurisdiction is often the starting point of the search. In the UAE, that typically means operating within either DIFC or ADGM, while in Riyadh many firms continue to focus on KAFD and other recognised Grade A business districts.

Beyond location, occupiers expect high technical standards and confidence around delivery, but priorities vary by firm type. Hedge funds typically focus on secure infrastructure, resilient power and low-latency connectivity, while private equity firms, advisory businesses and family offices place greater emphasis on client-facing environments, prestigious addresses and privacy.

Are firms moving or staying put?

The balance has shifted towards lease renewals, although often because of limited alternatives rather than preference - the shortage of available Grade A space across major financial districts means many occupiers have few relocation options.

Moves are generally driven by business growth, pre-leasing opportunities in future developments, or regulatory and licensing requirements. As a result, demand remains strong, but mobility is constrained by supply.

Which locations are gaining momentum?

While traditional financial districts remain the preferred choice, occupiers are increasingly exploring alternative locations.

In Abu Dhabi, ADGM's expansion onto Al Reem Island is creating new opportunities, while demand is also extending into areas such as Masdar City. In Dubai, firms unable to secure space in DIFC are looking at Downtown Dubai, One Central and Business Bay. In Riyadh, KAFD remains the benchmark address, although occupiers are also considering northern districts and other Grade A locations as availability pressures continue.

What are you seeing in terms of fit-out expectations?

Leading firms continue to invest in bespoke, high-quality fit-outs, particularly private equity and advisory businesses where the office plays an important role in reinforcing brand identity and supporting client relationships.

At the same time, demand for fitted, managed and Cat A+ space is growing rapidly. Speed is a key consideration; after securing scarce office space, many occupiers are reluctant to add lengthy fit-out programmes before becoming operational.

Flexible and serviced offices are also seeing increased demand, particularly in Riyadh, where firms establishing regional headquarters often need interim accommodation while waiting for permanent premises. This is creating a more polarised market, with bespoke workplaces at one end and plug-and-play solutions at the other.

Are firms using space differently?

Trading and analyst teams often require higher-density environments, while many firms are investing more heavily in collaboration areas, meeting rooms and client-facing facilities.

There is also greater emphasis on wellness and workplace experience as firms compete for talent. Increasingly, offices are expected to serve a dual purpose: functioning as efficient workplaces while also acting as a physical representation of a firm's brand.

What does the outlook for the rest of 2026 look like?

The key factor will be the delivery of new supply. Significant office developments are expected across Dubai, Abu Dhabi and Riyadh, and pre-leasing activity is likely to remain strong as occupiers seek to secure future options before completion.

Although rental growth remains positive, the pace of increases is beginning to moderate as additional supply comes to market.

For occupiers, the message is clear: in markets where vacancy rates remain below 5%, the best opportunities are often secured well before space is delivered. Firms planning 12 to 18 months ahead are achieving the strongest outcomes, while those waiting for a lease event are increasingly finding themselves renewing by default rather than by choice.

Read the full Niche Financial Sector update.